Case title:
Daimler Financial Services Pvt Ltd v. Vikash Kumar & Anr.
Date of Order:
24th June 2020
Bench:
Hon’ble Mr. Justice Anil Kumar Choudhary
Parties:
Petitioner(s): Daimler Financial Services Pvt Ltd
Respondent(s): 1. Vikash Kumar
2. Vikram Kumar
SUBJECT:
The Hon’ble High Court of Jharkhand (hereinafter referred to as ‘the High Court’ or ‘the Court’) in the writ petition, quashed the orders of the District Judge XIV and the Presiding Officer of the Commercial Court in a dispute surrounding a loan agreement. The central issue is whether the Commercial Court in Dhanbad has the authority to hear and decide on this specific case, given the changes in the pecuniary value criteria brought about by a 2018 amendment to the Commercial Courts Act and the absence of the state government notification specifying the relevant value.
IMPORTANT PROVISIONS:
The Constitution of India, 1950 (Constitution):
The Commercial Courts Act, 2015 (the Act):
- Section 2(1)(i)
- Section 3(1-A)
OVERVIEW
- The petitioner filed a writ petition in the Court under Article 227 of the Constitution and sought to invalidate or reverse the Commercial Court’s decision.
- The order pertained to dismissing a case, which pertains to enforcing an award in a dispute connected to a loan agreement.
- The order was dismissed based on the absence of an official notification from the State Government specifying a particular financial threshold for the case. The situation arose due to modifications made to the Commercial Courts Act, as amended by the 2018 Commercial Courts Amendment.
- The disagreement between the parties, that arose due to the non-repayment of the loan as per their agreement, was sent to a single arbitrator who decided the award.
- The petitioner subsequently filed a petition to enforce this award.
ISSUES RAISED:
- Whether the changes can be applied retroactively?
- Whether retroactively applied changes affect the jurisdiction of the Commercial Court in this specific case?
ARGUMENTS ADVANCED BY THE PETITIONER:
- The Amendment Act received presidential assent on 20.08.2018 though inadvertently due to a printing error in the instant application, the said date was wrongly mentioned.
- Said Act had been published in the Gazette on 21.08.2018 but the same was applicable with retrospective effect from 03.05.2018.
- Conjoint reading of sections 3(1-A) and 2(1)(i) of the Commercial Courts Act, 2015, as amended by the Amendment Act of 2018 implies that the Central Government is empowered to notify the specified value as defined under section 2(1)(i)
- The impugned order issued by the Commercial Court should be annulled. Commercial Court should be directed to continue with the Execution case.
- The execution petition is thus maintainable in the Commercial Court.
ARGUMENTS ADVANCED BY THE RESPONDENT:
- Taking support of the case of Vijay Cotton and Fiber Company v. Agarwal Cotton Spinning Pvt Ltd and Radhey Shyam & Anr. V. Chhabi Nath & Ors., the respondent argued that legal challenges to judicial orders can be made through a petition under Article 227 of the Constitution.
- The impugned order is not flawed and should not be a matter for the Court to address.
- The petitioner’s conduct is unfair and the petitioner’s company forcefully repossessed a vehicle belonging to the respondent.
- Writ Petition lacks merit and should be dismissed.
JUDGEMENT ANALYSIS
- The provisions of section 3(1-A) of the Act, modified by the Amendment Act of 2018, allow the state government, in consultation with the High Court, to specify a minimum financial value for certain cases, which could not be less than 3 lakh rupees.
- The Commercial asserted that it had the authority to determine cases with a minimum pecuniary value of one crore rupees or more, as set by the Central Government. But determined that due to the absence of a state government notification under section 3(1-A) specifying the value, the Court lacked jurisdiction to adjudicate the execution petition and dismissed it.
- Each Court will have the authority to handle cases within its designated district.
- The notification officially comes into effect from the date of its issuance, marking the beginning of the operation of these Commercial Courts in the mentioned districts.
- The Court concurred with the Petitioner regarding the provisions of Section 2(1)(i) and Section 3(1-A). It was established that in the absence of a notification, the provision now operates with the revised ‘specified value’ from May 3, 2018, rather than the previous ‘not less than one crore rupees’.
- The Court refrained from expressing any opinion on the merits of the Execution Petition as the Commercial Court had not yet assessed them yet.
CONCLUSION
The High Court of Jharkhand in the instant case, set aside the order issued by the District Judge XIV and the Presiding Officer of the Commercial Court in Dhanbad and directed the Commercial Court to continue with the Execution case according to the law, starting from the stage where it when the impugned order dismissing the case was issued. The Court was careful to not express any opinion regarding the arguments raised by the respondent in their counter-affidavit in this case. The Commercial Court in Dhanbad is free to make its own independent decisions on those grounds, without being influenced by this order from this Court, if and when these issues are raised before it.
